In the latest sign of growing tensions between Beijing and business partners, Google is postponing the release of two mobile phone models, just days after threatening to pull out its search business.
Google's position came on the eve of the launch of phones made with partners Samsung and Motorola, and expected to be released this Wednesday with China Mobile as the carrier.
Just last week Google said it suffered cyber attacks from sources originating in China and would no longer censor its search results in the country. It even said it was considering pulling out of China all together.
The government said Google must obey China's laws, suggesting Beijing was giving no ground in talks over Internet censorship and the search giant's possible withdrawal.
Foreign enterprises in China need to adhere to China's laws and regulations, respect the interests of the general public and cultural traditions and shoulder corresponding responsibilities. Google is no exception, said Foreign Ministry spokesman Ma Zhaoxu at a regular news briefing.
China has the world's most-populous mobile phone market, with more than 700 million accounts and increasingly prosperous customers who readily pay for the latest technology and services.
China also has the world's most-populous Internet market, with more than 384 million people online, bigger than the entire U.S. population.
The chief executive of China's e-commerce giant Alibaba , which operates the China arm Yahoo, said Tuesday at a conference in Taiwan that foreign companies such as Google should not pull out of China.
It is easy to give up, but one must hang on, said Jack Ma. China will set the rule of [the] game in the 21st century, and businesses must not go to the mainland for the profit motives only but rather to take part in setting the rules.